Section 134 — Rent Paid 80GG | ITA 2025

Section 134 — RENT PAID DEDUCTION (1961 s. 80GG SUCCESSOR)

Section 134 is the substantive equivalent of 1961 s. 80GG. For assessees NOT receiving HRA (housing rent allowance) but paying rent on accommodation, deduction equal to LEAST OF: (a) ₹ 5,000 per month / ₹ 60,000 per year; (b) Rent paid LESS 10% of total income (excluding LTCG, deductions); (c) 25% of total income (similar exclusions). Conditions: (i) assessee / spouse / minor child / HUF must NOT own residential property at the place of work; (ii) rent paid for accommodation occupied for own residence; (iii) Form 10BA self-declaration. Available ONLY in OLD regime.

Statutory text — Income-tax Act, 2025

Marginal note — Deductions in respect of rents paid

(1) In computing the total income of an assessee, subject to other provisions of this section, there shall be deducted any expenditure incurred by him towards payment of rent (by whatever name called) in respect of any furnished or unfurnished accommodation occupied by him for the purposes of his own residence.

(2) The deduction under sub-section (1) shall be allowable on payment of such rent exceeding 10% of his total income, subject to a maximum of ` 5000 per month, or 25% of total income for tax year, whichever is less.

(3) For the purposes of deduction under sub-section (1), such other conditions or limitations having regard to the area or place in which such accommodation is situated and other relevant consideration, as may be prescribed, shall be taken into account.

(4) No deduction under this section shall be allowed to an assessee in any case, where—

(a) any residential accommodation is—

(i) owned by the assessee or by his spouse or minor child or, where such assessee is a member of a Hindu undivided family, by such family at the place where he ordinarily resides or performs duties of his office or employment or carries on his business or profession; or

(ii) owned by the assessee at any other place, being accommodation in the occupation of the assessee, the value of which is to be deter- mined under section 21(6) or (7)(a); or

(b) the assessee has any income falling in Schedule III (Table: Sl. No. 11).

(5) For the purposes of this section, the expressions “10% of his total income” and “25% of his total income” shall mean 10% or 25%, as the case may be, of the total income of the assessee before allowing deduction for any expenditure under this section.

Corresponding provision — 1961 regime

INCOME-TAX ACT, 2025	INCOME-TAX ACT, 1961
INCOME-TAX ACT, 2025 — s. 134	INCOME-TAX ACT, 1961 — s. 80GG
Rent paid deduction for non-HRA assessees	1961 s. 80GG
Least of: ₹ 60K / Rent − 10% TI / 25% TI	1961 s. 80GG formula
No-house-ownership-at-workplace condition	1961 s. 80GG proviso
Form 10BA self-declaration	1961 Rule 11B

PLANNING NOTES

(i) Typical beneficiaries: self-employed professionals / freelancers paying rent without employer HRA. Salaried with HRA cannot claim s. 134. (ii) For inter-city work (employee's family in different city), house-ownership-at-workplace test applies — verify residency-at-workplace. (iii) Maximum deduction is modest (₹ 60K / year) — but stacks with s. 123 / 126 / etc. (iv) Form 10BA filing is critical — without it, AO disallows.

CROSS-REFERENCES

Section 16 — HRA exemption (mutually exclusive with s. 134).
Income-tax Rules, 2026 — Form 10BA equivalent.

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